FBD Holdings’ results for the first six months of the year, published at the end of last week, showed a pre-tax profit of €39m. The insurer’s earnings were boosted by the delivery of a long-awaited High Court ruling on the COVID-19 business interruption insurance case brought by four pub owners in 2021.

That ruling last month means that FBD can have some certainty over how much the issue will cost to settle.

The company said in its results that the figure would be €27m, down from an estimated €42m in its end-of-year 2022 accounts.

COVID ruling

While that €15m difference between the old estimate and the new estimate for the cost of COVID business interruption claims forms a substantial portion of the profit in the period, there was also growth in insurance revenue and a significant turnaround in investment returns.

The changing interest-rate environment, driven by the European Central Bank’s significant cycle of hikes in the last year, means that FBD’s investment portfolio is now starting to make positive returns as bond yields rise.

For customers of the company, the rise in the cost of insurance – averaging 4.6% across all policies – is another unwelcome cost increase at a time when farm incomes are under pressure. The rising prices were not evenly distributed across business areas with private motor premiums only increasing 1.7% while the average home premium jumped by 9.5%.

FBD, like many insurers, had encouraged policyholders to make sure they had sufficient buildings insurance to fully cover the price of rebuilding at a time when construction costs were rapidly increasing.

Tractor premiums

Also of interest to farmers is the increase in the average tractor premium by 8.8%.

FBD said the rise was driven by a higher proportion of newer tractors insured, an increase in the value of existing tractors and inflation in motor damage claims.

Finally, commenting on the results, FBD group chief executive Tomás Ó Midheach said the performance in the first six months was achieved in a period where the injury claims experience was benign and there were no significant weather events.